Crude oil futures experienced a decline in early trading on Friday, influenced by sluggish economic indicators from several key economies.
On the Multi Commodity Exchange (MCX), August crude oil futures started the day at ₹6,767, down by 1.15% from the previous close of ₹6,846. Similarly, September futures were trading at ₹6,699, reflecting a 0.36% decrease from ₹6,723.
The weakening was partly attributed to a robust US dollar, which dampened demand for commodities like crude oil among investors holding other currencies. A stronger dollar typically increases costs for these investors.
Furthermore, economic developments in major economies added to the downward pressure. In the United States, jobless claims rose unexpectedly by 10,000 to 243,000 for the week ending July 13, surpassing market expectations of around 230,000.
China’s Third Plenum of the Communist Party, held on Thursday, failed to provide a clear economic roadmap, disappointing market hopes for significant stimulus measures. China, the world’s second-largest consumer of crude oil, plays a crucial role in global demand dynamics.
Meanwhile, in Japan, the annual inflation rate remained steady at 2.8% in June 2024 for the second consecutive month. This data is anticipated to influence the upcoming policy meeting of the Bank of Japan scheduled for July 30-31, with expectations that it could prompt considerations of interest rate adjustments.
In other commodity markets, July natural gas futures on MCX opened lower at ₹176.30, down by 0.84% from the previous close of ₹177.80. On the National Commodities and Derivatives Exchange (NCDEX), August jeera contracts rose by 1% to ₹27,300, while August turmeric (farmer polished) futures fell by 1.75% to ₹15,934.
The fluctuating trends across these commodities underscore the complex interplay of global economic conditions influencing market sentiment.
This comprehensive analysis highlights the intricate factors driving movements in crude oil and other commodity markets, reflecting broader economic uncertainties across the globe.
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